woman putting cash into piggy bank from pelican state credit union

What’s a Share Certificate?

Saving money is a subject we could talk about for days. In fact, we do; it’s one of the many reasons we started this blog. One tool to help you save and make your money work for you is a share certificate, sometimes also called a certificate of deposit (CD).

As a Pelican MyBranch Member Service Representative, I get asked questions about share certificates almost every day. I wanted to help answer some of our most-asked questions regarding share certificates to give you the answers you need!

What’s the difference between a certificate of deposit (CD) and a share certificate?

This is an easy one! There’s actually no difference. CDs and share certificates are one and the same.

How does a share certificate work?

Think of share certificates as the ultimate savings account. As long as you have $500 or more available, you can transfer that money into a share certificate and choose how long you want to keep the funds in there.

Once the term ends, you have the choice to roll it over into a new term or have it deposited into your account. It’s a no-risk savings account that can net you some extra cash on money that you’re not using.

Why should I put my money in a share certificate over a savings account?

A share certificate isn’t a normal savings account. Share certificates offer greater rates than a savings account, and those rates are fixed for the length of the term.

There are a wide range of terms that you can choose from as well, whether it’s six months up to five years or something in between. The dividend rates you earn depend on the length of time you deposit your money in a share certificate, meaning you can earn more the longer you keep your money in a share certificate!

What type of income is needed to open a share certificate? Do I have enough money?

There’s no specific type of income required to open a share certificate. As long as you have an extra $500 to spare, you are able to open a share certificate and earn those rates.

What happens if I need the money?

If you need the money that you’ve set aside in a share certificate, you can withdraw it. However, there is a penalty on your dividend earnings for an early withdrawal.

Can I borrow against my share certificate?

You sure can! You can borrow against your share certificate with a Share Pledge Loan.

How do I know/calculate how much money my share certificate will earn?

We have an awesome share certificate calculator on our website that can project how much money you will earn.

For example, say you decide to put in $500 in your share certificate for two years, or 24 months. Our rate for 2-year share certificates is currently 3.20% APY*, so once the term ends, you would earn $32.51 in interest.

Is my money safe in a share certificate?

Absolutely! Our share certificates are federally insured up to $250,000, so there’s no risk in earning those savings.

Do you have a question about share certificates? Let us know in the comments below, and we’ll answer them!

*Pelican State CU membership required. APY = Annual Percentage Yield. To open a share certificate, you must open a primary savings account with Pelican State CU to become a member. There is a $10 minimum deposit to open a primary savings account and become a member ($5 to join + $5 minimum balance). There is a $500 minimum deposit to open a share certificate. Penalties may apply for early withdrawal. Rates effective as of 10/24/2018 and are valid for a limited time only. Your savings are federally insured by NCUA up to $250,000. Other restrictions apply. Contact a Pelican representative for details.

Lauryn Perret

I work our front lines in the MyBranch Call Center, and I love helping others! I’m a passionate pop culture fan. I live off of coffee and fun, and I’m a huge bookworm.